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Actuarial Aspects of PHI in the U.K.

Published online by Cambridge University Press:  11 August 2014

A. J. Sanders  and
N. F. Silby
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Extract

Schedule 1 of the Insurance Companies Act 1982 defines Permanent Health Insurance (PHI) as a class of Long Term insurance business being “… contracts of insurance providing specified benefits against risks of persons becoming incapacitated in consequence of sustaining injury as a result of an accident or of an accident of a specified class or of sickness or infirmity being contracts that:

(a) are expressed to be in effect for a period of not less than five years, or until the normal retirement age for the persons concerned or without limit of time, and

(b) either are not expressed to be terminable by the insurer, or are expressed be so terminable only in special circumstances mentioned in the contract.”

The fundamental features of PHI as developed in the U.K. are therefore:

(a) It provides specified benefits in the event of ill health.

(b) Cover may not be cancelled by the insurer (except under special circumstances described in the policy document) and hence the insurance is ‘permanent’.

Type
Research Article
Information
Journal of the Staple Inn Actuarial Society , Volume 31 , March 1988 , pp. 1 - 57
Copyright
Copyright © Staple Inn Actuarial Society 1988

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References

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